Shaped by trends in middle-class mobility, regulations, technology and sustainability, the specialty tires market will experience increased demand beyond the impact of the coronavirus, according to a new report from Smithers, The Future of Specialty Tires to 2025
Before the coronavirus impacted the global economy in 2020, specialty tires (those for motorcycles, the three major off-the-road applications characteristics and (mining/construction/ports, agriculture/forestry and industrial and aviation) represented a standout opportunity for above-average growth prospects in the global tire industry. The recent historical period from 2015 up until the beginning of 2020 was one of robust ongoing recovery from the previous difficulties stemming from the 2008 financial crisis.
Going into 2020, the fundamentals at the application and regional levels appeared to remained strong for continued, though somewhat slower, growth in both value and unit volume terms. Solid, modest economic growth, stable/firm commodity (notably oil and elastomer) prices, demographics, and vehicle and tire technology advances all supported continued expansion of market demand.
Our estimates and forecasts of the specialty tire industry were made immediately prior to the unfolding of COVID-19 as a serious public health and economic threat. We anticipated a total market value of $46.5 billion in 2020, up 5.3% per year (CAGR, compound annual growth rate) from 2015. Based on growth in end uses, regional economies and greater value-added tire technologies (all three touched upon below), as well as modest price increases (with stable commodity prices and improved efficiencies), we envisioned still impressive annual growth of 4.9% per year (CAGR) through 2025, for a total specialty market value of $58.9 billion.
Impact of COVID-19
The unanticipated appearance and spread of the COVID-19 virus, and not least the responses of public health and political leaders to suppress mobility and economic activity in many countries, has suddenly changed the economic, political, industrial and transportation landscapes. This is affecting all aspects of the global economy, collapsing (for a currently unknown duration) vehicle and equipment productions sales, usage (and with it, tire wear rates and replacement purchases), as well as tire production and trade (in tires as well as raw materials). The Future of Specialty Tires to 2025
market report presents five scenarios that assess the impact of the coronavirus on the market based on Smithers research and additional data from the International Monetary Fund.
Continued advances in tire materials and technologies, and in tire management, are not developments expected to be impacted by the current disruptions, although near-term investment and uptake may be delayed (where they entail added cost to the purchaser/operator). These developments include:
Find out more and download the brochure here: The Future of Specialty Tires to 2025
- Emerging powertrains, specifically electric, and having the greatest potential impact on the motorcycle market and newly designed tires to address performance needs
- Vehicle autonomy, notably in the gradual phase-in of aspects of motorcycle driving automation, closely following developments in the passenger car and commercial truck tire segments
- Advances in tire compounds, designs and manufacture, including the addition of value-added technologies such as sensors that improve safety, performance and asset management (the latter being one of the driving forces in the off-the-road tire applications such as mining and construction), and the improvement of sustainability in terms of tires in use, and the environmental impact of the tire lifecycle.